INCOME TAX ACT, 1961

Section 263

Revision under section 263 - Validity - All issues considered by AO in re-opened assessment as re-opening of assessment was done exclusively for examining alleged Hawala purchases. -

Assessee contended that PCIT wrongly passed an order under section 263 setting aside assessment order passed under section 143(3) read with section 147 for fresh determination of income after proper examination of the facts and law. Case of assessee was that all issues were considered by AO in re-opened assessment as re-opening of assessment was done exclusively for examining alleged Hawala purchases. Held: CIT failed to answer very primary question that if purchases were going to be treated as bogus and addition was going to be made of entirety of purchases, then what happened to sales that were disclosed, as also stocks by treating said purchases as bogus. Sales disclosed could not be touched. The stock statement of the assessee would also be disturbed. A perusal of the assessment order however, showed that these were examined by AO and after considering facts, estimated addition of 5% of purchases was made by AO. Issues were examined by AO and just because opinion as arrived by AO was at a variation of the opinion of PCIT, it would not grant PCIT powers of revision under section 263.

Distinguished:N.K. Proteins Ltd. v. DCIT (2016) 72 Taxman.com 289 (Gujarat)Followed:Rampyari Devi Saraogi v. CIT & Others (1969) 67 ITR 84 (SC) : (1968) TaxPub(DT) 0135 (SC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2010-11

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